South Dakota Employment Screening Overview
South Dakota is generally employer-friendly for background screening, with no statewide ban-the-box law, salary history ban, or restrictions on credit checks for employment purposes.
Employers have broad discretion in conducting criminal background checks and drug testing, though federal requirements like the FCRA and Title VII still apply, and local ordinances may impose additional obligations.
What's Permitted
- No statewide ban-the-box law restricting criminal history inquiry timing
- No salary history ban; employers may ask about prior compensation
- No state restrictions on credit checks for employment decisions
- E-Verify voluntary for most private employers; federal contractors must comply
What's Prohibited
- Discriminating against medical cannabis cardholders based solely on positive drug tests, except in safety-sensitive positions
- Using arrest records or expunged petty offenses older than five years in hiring decisions
- Requiring genetic information disclosure or using it in employment decisions
- Failing to obtain written consent before conducting employment background checks
Ban the Box Laws
NoStatus Summary
South Dakota has no statewide or local ban-the-box laws; employers may ask about criminal history anytime. Federal Title VII applies; see EEOC guidance (https://www.eeoc.gov/laws/guidance/enforcement-gui... Use official DCI background checks (https://atg.sd.gov/LawEnforcement/Identification/b...
Key Requirements
South Dakota — No state ban-the-box law
No statewide ban-the-box law:
- No statewide ban-the-box law
- Employers may ask anytime
- No local ordinances identified
- Monitor municipal rule changes
Sources: https://sdlegislature.gov/Statutes/23A , https://sdlegislature.gov
Title VII (Civil Rights Act of 1964)
Federal anti-discrimination rules apply:
- Prohibits disparate treatment
- Requires individualized assessments
- Policies causing disparate impact banned
- Track outcomes by protected classes
Sources: https://www.eeoc.gov/laws/guidance/arrest_convicti... , https://www.eeoc.gov/laws/guidance/enforcement-gui...
Fair Credit Reporting Act (FCRA)
Federal reporting and notice rules:
- Requires written consent
- Pre-adverse notice required
- Seven-year lookback for certain reports
- Convictions reportable without limit
Sources: https://atg.sd.gov/LawEnforcement/Identification/b... , https://dlr.sd.gov/employment_laws/publications/sd...
SD expungement statutes (SDCL 23A)
State criminal-record availability rules:
- Automatic removal: Class 2/petty offenses
- Five-year post-sentence removal
- Felonies remain unless petitioned
- Court sealing limits governmental access
Sources: https://sdlegislature.gov/Statutes/23A , https://sdlegislature.gov/Statutes/23A-3
SD background-check authorization & DCI services
Procedures and official channels:
- Applicant written consent required
- Use fingerprint-based official checks
- State checks: $30; state+federal: $50
- Prefer official DCI over commercial records
Sources: https://atg.sd.gov/LawEnforcement/Identification/b... , https://sdlegislature.gov
Childcare and school screening statutes
Heightened screening for child-facing roles:
- Mandatory checks for school hires
- Childcare: Central Registry checks required
- Certain offenses cause statutory disqualification
- No registry-listed persons may provide care
Sources: https://dss.sd.gov/childcare/licensing/backgroundc... , https://sdlegislature.gov/Statutes/13-10-12
Ban the Box Best Practices for South Dakota Employers
- Obtain written consent before conducting background checks
- Conduct individualized assessments relating convictions to job duties
- Document policies, decisions, and FCRA adverse-action steps
- Use official state DCI/Attorney General background checks for accuracy
- Monitor screening outcomes for disparate impact and adjust policies
Salary History Ban
NoNo South Dakota salary history ban
State has no statewide or local ban as of Jan 2026:
- Employers may ask prior compensation.
- Employers may use salary history.
- No state law prohibits such inquiries.
- No municipal ordinances exist statewide.
- Employers should monitor legislative changes.
Sources: https://dlr.sd.gov/employment_laws/publications/sd... https://sdlegislature.gov/Session/Bill/23750/24609...
S.D. Codified Laws § 60-12-15 (Equal pay)
Prohibits sex-based wage discrimination for similar work:
- Prohibits unequal pay based on sex.
- Applies to substantially similar work.
- Pay differentials require legitimate justification.
- Justifications: seniority, merit, productivity systems.
- Employers should document pay decisions.
Sources: https://dlr.sd.gov/human_rights/laws_rules.aspx https://sdlegislature.gov/Statutes/60-12-17
South Dakota Human Relations Act (SDCL Chapter 20)
Covers compensation discrimination across protected classes:
- Prohibits pay discrimination by protected class.
- Applies statewide to compensation decisions.
- Enforced by DLR Division of Human Rights.
- Remedies include back pay and policy changes.
- Employees may file administrative complaints.
Sources: https://dlr.sd.gov/human_rights/laws_rules.aspx https://dlr.sd.gov/human_rights/publications/avoid...
SB 109 (2023 pay-transparency proposal — failed)
Introduced pay-range disclosure bill that did not pass:
- Would have required posting pay ranges.
- Introduced as Senate Bill 109 in 2023.
- Bill did not pass the legislature.
- No current pay-transparency mandate enacted.
- Monitor future legislative activity.
Source: https://sdlegislature.gov/Session/Bill/23750/24609...
Salary History Best Practices for South Dakota Employers
- Allow salary-history questions, but use job-related criteria only
- Establish objective pay bands tied to role and experience
- Document compensation decisions and business justifications thoroughly
- Conduct regular pay audits to detect and correct disparities
- Train managers on equal-pay law and retaliation protections
Consumer Credit Checks
NoNo SD ban on employer credit checks; employers must follow FCRA plus SD anti-discrimination law (SDCL §20-13). CFPB is the primary FCRA enforcer. Sources: https://dlr.sd.gov/employment_laws/publications/sd... https://sdlegislature.gov/Statutes/20-13
Key Requirements
Fair Credit Reporting Act (FCRA)
Federal rules governing employment credit checks: https://dlr.sd.gov/employment_laws/publications/sd...
- Written consent required before obtaining reports.
- Pre‑adverse notice required before adverse action.
- Post‑adverse notice with FCRA language required.
- Most negative items excluded after seven years.
- CRA accuracy and dispute obligations apply.
Title VII, Civil Rights Act (1964)
Federal disparate-impact and anti-discrimination standards: https://dlr.sd.gov/employment_laws/publications/sd...
- Prohibits discrimination on protected traits.
- Disparate impact claims require business necessity.
- Credit checks may cause disparate impact.
- Individualized assessments required for adverse actions.
SDCL §20-13-1 (South Dakota)
State unlawful employment discrimination statute: https://sdlegislature.gov/Statutes/20-13-1
- Covers race, color, creed, religion.
- Also covers sex, ancestry, disability, national origin.
- Discrimination claims can lead to civil suits.
SDCL Chapters 54-15 and 54-16 (Credit reporting)
State credit-reporting laws and exemptions: https://sdlegislature.gov/Statutes/54-15
- State law exempts most employer uses.
- FCRA governs employer credit-check procedures.
- Security freeze provisions available to consumers.
- No employer veto over authorized checks.
SDCL §51A-6A-17 (Trust companies)
Trust-company background check and eligibility rules: https://sdlegislature.gov/Statutes/51A-6A-17
- Fingerprint-based state and federal checks required.
- Felony or fraud convictions bar employment.
- Civil penalties for willful violations apply.
SDCL §60-4-11 (Off-duty tobacco use)
Limits on adverse actions for off-duty tobacco use: https://dlr.sd.gov/employment_laws/publications/sd...
- Prohibits adverse action for off-duty tobacco.
- Exceptions for bona fide occupational requirements.
- Remedy available via civil suit.
SDCL §60-2-20 (Genetic information)
Prohibition on employer use of genetic information: https://dlr.sd.gov/employment_laws/publications/sd...
- Employers may not seek genetic information.
- Limited exceptions for law-enforcement investigations.
- Violations constitute unlawful employment practices.
SDCL §23A-3-34 (Expungement)
State expungement timeline affecting background checks: https://sdlegislature.gov/Statutes/23A-3-34
- Automatic expungement applies to some convictions.
- Automatic removal after five years (amended 2021 from ten years).
- Expunged records may not appear on reports.
Credit Check Best Practices for South Dakota Employers
- No state-specific prohibition—comply with federal FCRA and Title VII
- Provide clear notice, obtain written authorization, follow adverse-action process
- Observe seven-year lookback for certain financial records under $75,000
- Ensure credit checks are job-related and business necessity documented
- Monitor for disparate impact; justify or revise screening practices
Marijuana Protection
Medicinal Marijuana
Qualifying patients in non-safety-sensitive jobs must be treated like employees using prescribed pharmaceuticals regarding testing and employer interactions (SDCL 34-20G-22). Employers may act on positive metabolites for safety-sensitive roles and may ban workplace use/impairment (SDCL 34-20G-24).
Recreational Marijuana
South Dakota law provides no employment protections for recreational marijuana. Private employers generally may test and discipline per policy, subject to federal law and nondiscrimination requirements; no statewide private-sector drug-testing statute governs testing.
Drug Testing Regulations
As of January 2026: No statewide private‑sector drug‑testing statute; state safety‑sensitive employees (SDCL ch. 3‑6F; ARSD 55:05), community support providers (SDCL 27B‑1‑19), and medical‑cannabis rules (SDCL 34‑20G‑22, 34‑20G‑24) govern testing.
Permitted Testing Types
Pre-Employment
Allowed; state safety-sensitive positions require post-offer mandatory testing.
Random Testing
Allowed; private employers may random test, must be nondiscriminatory.
Reasonable Suspicion
Allowed; required for certain state/community roles; needs reasonable basis.
Post Accident
Allowed; employers may test after accidents consistent with policy.
Workers' Compensation Discount
No state law ties workers' compensation premium discounts to employer drug-testing in South Dakota.
Research shows no statutory workers' compensation discount linked to drug-testing requirements.
Best Practices
- Provide written policy, notice, and obtain consent.
- Document and justify safety-sensitive position classifications.
- Apply testing uniformly to avoid discrimination claims.
- Confirm positives; follow federal rules where applicable.
- Respect medical-cannabis protections; act on impairment or safety risks.
Clean Slate Laws
NoNo state clean‑slate employment law; SDCL 23A‑3‑34 provides automatic removal of petty offenses/Class 2 misdemeanors after five years; SDCL 23A‑3‑35–37 auto‑expunges completed diversions; sealing, not destruction. Employer access via fingerprint checks is unclear. https://sdlegislature.gov/Statutes/23A-3-34 https://sdlegislature.gov/Statutes/23A-3 https://atg.sd.gov/LawEnforcement/Identification/b...
E-Verify Requirements
VoluntaryWho Must Use E-Verify
Private Employers [South Dakota Codified Laws Chapter 60; IRCA (Form I-9)]
No state E‑Verify mandate for private employers; participation is voluntary. Federal I‑9 (IRCA) requirements still apply.
Sources: https://sdlegislature.gov/Statutes/60 https://dlr.sd.gov/employment_laws/default.aspx
Federal Contractors [Federal Acquisition Regulation (FAR) E‑Verify clause]
Yes, if a federal contract contains the FAR E‑Verify clause and meets federal thresholds: contractors must enroll and verify covered employees per the contract.
Sources: https://dlr.sd.gov/employment_laws/default.aspx https://mylrc.sdlegislature.gov/api/Documents/2439...
Any other relevant groups [State procurement/contracting policies; agency-specific requirements]
Unclear statewide requirement for state contractors; some sources assert E‑Verify for certain state contracts (e.g., >$50,000). Confirm obligations with the contracting agency.
Sources: https://dlr.sd.gov/workforce_services/wioa/wioa_ma... https://sdlegislature.gov/Statutes/60
Background Check Regulations
Follow federal FCRA/EEOC rules; South Dakota also imposes state requirements—limits on access to state criminal records, occupational-licensing review procedures, and record-release rules—so comply with both federal law and SD statutes/guidance.
FCRA Compliance Process
Disclosure & Authorization
Provide clear, standalone written disclosure that a background check will be conducted. Obtain separate written authorization from the applicant before ordering the report.
Obtain Background Report
Order the background check from a Consumer Reporting Agency (CRA). Ensure the CRA is FCRA-compliant and provides accurate, up-to-date information.
Pre-Adverse Action Notice
If considering denying employment based on the report, provide the applicant with:
- Copy of the background report
- Copy of "A Summary of Your Rights Under the FCRA"
- Reasonable time to respond (typically 5 business days)
Adverse Action Notice
If final decision is made to deny employment, provide written notice including:
- Name, address, and phone number of the CRA
- Statement that the CRA did not make the decision
- Notice of right to dispute report accuracy
- Notice of right to request additional free copy within 60 days